Britain's leading aid charity is facing an inquiry by watchdogs after launching an extraordinary attack on the Coalition’s austerity measures.

Oxfam infuriated Conservative MPs by unveiling a mock film poster on Twitter, accusing the Government of creating a ‘perfect storm’ – involving high prices, unemployment, zero-hours contracts and childcare costs – that is ‘forcing more and more people into poverty’.

Charities are barred by law from political campaigning and Tory MP Conor Burns said he had asked the Charity Commission to launch an urgent investigation.

The Oxfam Twitter advert has been criticised by Tory MPs who warned the charity would lose support

A spokesman for the watchdog said it had begun an assessment – a first stage of a process which could lead to full inquiry.

A
Government source rejected the claims by Oxfam. He said: ‘I think
they’ll find unemployment is falling, that we’ve just taken action over
zero-hour contracts, and that there was a Childcare Bill in the Queen’s
Speech which will offer tax-free childcare to all parents with kids
under 12 by autumn 2015 and cover 85 per cent of childcare costs of
those families receiving universal credit.’

Mr Burns said: ‘Most of us operated under the illusion that Oxfam’s focus was on the relief of poverty and famine overseas.

‘I cannot see how using funds donated to charity to campaign politically can be in accord with Oxfam’s charitable status.’

Tory MP Conor Burns condemned the 'foolish' campaign which he said would lose Oxfam support

‘This has lost you a lot of supporters. Very foolish.’

He has now written to the Charities Commission requesting an investigation into the ‘overtly political’ attack on ‘the policies of the current Government’.

He questions whether the advert is breach of Oxfam's charitable status.

The Conservatives are particularly angry at the inclusion of unemployment and high prices in the list.

'This has lost you a lot of supporters. Very foolish'Conor Burns, MP

According to the latest figures, unemployment is down by more than 400,000 in the last two years.

Inflation has also fallen in recent months, with wages now rising at the same rate as prices.

Tory MP Dan Byles said: ‘Oxfam is a charity. They are barred by law from political campaigning.’

But Ben Phillips, Oxfam campaigns and policy director, said: "Oxfam is a resolutely non-party political organisation - we have a duty to draw attention to the hardship suffered by poor people we work with in the UK.

"Fighting poverty should not be a party political issue - successive governments have presided over a tide of rising inequality and created a situation where food banks and other providers provided 20 million meals last year to people who could not afford to feed themselves.

"This is an unacceptable situation in one of the world's largest economies and politicians of all stripes have a responsibility to tackle it."